Credit card debt has never been higher. Here’s how to keep yours under control.


I didn’t have a credit card until I was 25 years old. I had moved to Vancouver from Singapore five years prior, but as a non-Canadian resident with limited credit history, getting one meant putting down a secured deposit for a year. As a student, that wasn’t something I could afford right away.  

Eventually, though, I did get a credit card, with a whopping $1,000 credit limit. I admit, it felt like freedom.  

Shortly afterward, I celebrated my graduation with a summer-long trip around Europe. Having my credit card made everything easier: booking flights and accommodation, and even getting cash back on my splurges. I honestly wondered how I had lived so long without this magical piece of plastic!  

And then my bills started pouring in, and reality hit me hard

Mounting debt levels

Today, with the rising cost of living in Canada, I feel a frisson of dread every time I open up my credit card statement. As I studied my most recent bill, I couldn’t help but kick myself when I realized I’d forgotten to pause my Crave subscription after the annual discount ended. And I had to wonder if I really needed that pair of Lululemon Align tights given how much the cost of my grocery bills and coffee runs have increased in the last year. 

I know I’m not alone. More and more Canadians are relying on credit cards to pay their expenses. Last year, credit card balances hit an all-time high of $107.4 billion, according to Equifax Canada, with the average amount of non-mortgage debt per consumer rising to $21,131. And multiple people are having trouble making full credit card payments, which is only leading to higher fees and more debt.

If you tend to carry a balance on your credit card, it’s important to consider a low-rate card. If possible, transferring your balance from high-rate cards onto a card with a lower interest rate may help you pay yours off faster while saving on interest.

Of course credit cards can be a useful tool in your financial toolkit, but knowing how best to integrate them into a smart financial strategy is essential to ensuring your credit card debt doesn’t spiral out of control. Because let’s be honest, it’s gotten altogether too easy to pay by credit now and worry about bills later. And don’t even get me started about the allure of online shopping.  

Here are some strategies that can help with managing your credit card debt, so you don’t dread the arrival of the monthly bill.  

Know your budget

A few years ago, at the height of the pandemic, I had to make a sudden trip to Singapore for an urgent family situation. It was an unforeseen expense that put a serious dent in my savings. But on the plus side, it inspired me to create a budget, an emergency fund and a realistic spending plan.  

My first step was to get a solid lay of the land. I made a budget showing all of my income sources and expenses, as well as my debt payments. I wanted to be prepared the next time I was faced with an emergency, and rebuild my savings again.  

One common way to do budgeting is to follow the 50-30-20 rule: allocate half of your paycheque to essential expenses such as groceries and bills, 30% to discretionary items like a night out with friends or a new pair of jeans, and the remaining 20% to investments or savings. But ultimately, your budget needs to be tailored to your unique situation. The goal is to ensure your total expenses do not exceed your total income by plotting out in advance exactly how much you can spend (and hopefully how much you will save).  

Of course, unexpected expenses typically arise when you least expect them to, so building up an emergency fund is a good idea too. But I try to remind myself that a sale at Lululemon does not qualify as a spending emergency!  

Turn on banking notifications

By enabling notifications on your banking applications, you can review your spending in real time. This is especially useful when you’re travelling, or if you forget to get a receipt for a purchase. An immediate alert can help you keep track of your budget and potentially reduce the urge for impulse purchases.  

Beyond basic transaction notifications, Cindy Cheng, Product Manager at Vancity also recommends looking into setting card controls and alerts. Vancity’s enviro™ Visa* card, for example, allows cardholders to set a maximum dollar amount per transaction or receive an alert when they’re approaching their limit.

Cheng also suggests setting up automatic payments and paying at least the minimum amount on time to ensure your account remains in good standing. You can go a bit beyond this, she says, by adding $10 to every payment, which might not sound like much, but which can gradually help you to pay down your balance sooner. Plus, even small amounts can help lower your interest payment.   

Pay debt in priority order

Credit cards tend to have high interest rates and low minimum payments, which makes it crucial to prioritize how you pay your debt.  

Using the avalanche method, you can organize your credit card payments by prioritizing the ones with the highest interest rates. After making the minimum payments on all debts, allocate any extra funds to debts with the highest rates, followed by the next highest-interest debt. This allows you to make a dent in your costliest debts. But just a caveat that this strategy is most useful when you aren’t strapped for cash. 

Take advantage of loyalty points and cash back benefits

As a frequent traveler, I try to maximize the use of loyalty points offered by affiliate travel partner programs. Last year, I booked flights to Singapore on points, which felt like a huge leap from my travel emergency years back. I even had enough points leftover to book a weekend getaway to Los Angeles.  

While I used my loyalty points for travel, some cards offer cash back rewards that can be put toward paying off your credit card statement, and others offer rotating or fixed bonus categories that offer higher rewards for spending in specific areas, such as groceries, gas or online purchases. You can even support local businesses, if that’s important to you: Vancity’s enviro™ Visa Infinite card gives you 10 points for every $1 spent at select local businesses, along with additional discounts. 

And ultimately, by redeeming your points regularly, you can help to supplement your budget.  

Consolidate debt by using a credit line

With credit card interest rates typically running between 19.99% and 25.99%, it doesn’t take many missed or partial payments before your bill can start to snowball. Consolidating your debt into a personal line of credit or home equity line of credit with a lower interest rate can be a strategic way to pay down credit card debt and reduce overall interest costs.  

Cheng also adds that, if you tend to carry a balance on your credit card, it’s important to consider a low-rate card. If possible, transferring your balance from high-rate cards onto a card with lower interest rate may help you pay your balance off faster while saving on interest. At Vancity, you can do this without incurring a balance transfer fee. α

Speak to an expert

However you proceed when working to get your debt under control, keep in mind that it can also be helpful to speak with a professional. A guided approach supported by an expert that takes your personal situation into account can provide long-term strategies to managing and reducing credit card debt.  

Managing any amount of debt can feel daunting – especially with high interest rates. I’ll never forget the feeling of shock and anxiety back when my savings took a dive to travel unexpectedly to Singapore. But by taking a long-term view of the journey, I was able to not only pay it off, but also make budgeting, saving and spending more enjoyable overall.  

Learn more about the benefits of Vancity’s enviro Visa credit cards, and get started managing your debt smartly.   

* Trademark of Visa Int. Used under license.

α There is no fee to transfer your credit card balance from another financial institution. Please note there is no interest-free grace period on balance transfers. Interest will be charged on balance transfer amounts from the date of the transfer. 

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